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Pricing at Deutsche Telekom - Essay Example

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Name: Instructor: Course: Date: Pricing at Deutsche Telekom Deutsche Telekom is a German telecommunications company with its headquarters in Bonn, North Rhine-Westphalia, and Germany. In Europe, this is the largest telecommunications company, and it was formed in 1996 in the privatization of the former state-owned monopoly Deutsche Bundespost…
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Pricing at Deutsche Telekom
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Pricing at Deutsche Telekom

The company owns various subsidiary companies of which all of them have names starting with the letter T such as the T-Home; a Legacy Telephone, Broadband and IPTV Service Provider, the T-Online; an Internet Service Provider, the T-Mobile; A Mobile Network Operator, and the T-Systems; A business division, focused on providing services to public and business sector customers. Recently the company has unveiled a new structural group through the merging of the two organizational units T-Com and T-Online into the Broadband/Fixed Network (BBFN) strategic business area. This Broadband/Fixed Network business area is one of the largest providers in Europe with approximately over 9 million broadband lines, 40 million narrowband lines and 14 million registered Internet customers. The company also holds substantial shares in other telecom companies especially within the region including Central European subsidiaries such as Magyar Telekom in Hungary, T-Hrvatski Telekom in Croatia, and Slovak Telekom in Slovakia. Again these subsidiary companies some also hold shares in subsidiary companies such as maygar Telkom holds various shares in T-Crnogorski Telekom in Montenegro, and Makedonski Telekom in Macedonia; all of which have also been rebranded and included under the T-Com/T-Home umbrella. In the year 2009, the orange Telekom Company and the T-Mobile parent Deutsche Telekom announced of their involvement in advance negotiations to merge their UK operations to develop the largest mobile network in Britain that is now known as everything everywhere (EE) (Benoit 2012). The occurrence of such merging of large companies is a step by the companies to better secure the market such that they be having a better hand due to operating in large economies of scale. Deutsche Telekom has an exceptionally large and broad market share in the world. It is positioned in over 50 countries in Africa, Asia, Europe and America with the heaviest investment being in the United States and throughout Europe. It has a share market of approximately with almost ten million subscribers in Europe and a total of 50 million customers in Europe, Asia, and the United States. Having started in Germany as public owned the company became privatized in 1996 and has extended operations to a global level. Now the largest telecommunication company in the EU it is finding it difficult to expand its regional operations due to increased competition as a result of moving from regional to global markets and pricing pressures originating from increasingly restrictive EU sector specific legislation. The company generated a net income of €80 million on revenues of €64.6 billion in the year 2009. In relation to the previous year, 2008, this is a representation of a 76.5% drop in net income and a 4.8% increase in revenues when the company earned €340 million on €61.7 billion in revenue (Benoit 2012). The company is experiencing particularly high market penetration rates in Western Europe and the United States. The company is also serving market penetration of various emerging markets in countries such as such as Brazil, India, China, South Africa and Argentina in Africa, Asia and South America. Such markets are now just opening up and adopting such technologies thus providing good avenues to sink investments first for companies to have a greater chance at dominating the consumer markets. The company faces stiff competition from some of the various capital ... Read More
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